The relationship between organizational focus on AI, financial growth and sustainable development: Evidence from Europe

Daniele Giordino (), Elisa Ballesio (), Nourah Alshaghdali () and Dhruv Galgotia
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Daniele Giordino: Università Telematica Pegaso
Elisa Ballesio: UNITO - Università degli studi di Torino = University of Turin, UniCA - Université Côte d'Azur, GRM - Groupe de Recherche en Management - EA 4711 - UNS - Université Nice Sophia Antipolis (1965 - 2019) - UniCA - Université Côte d'Azur
Nourah Alshaghdali: Princess Nourah Bint Abdulrahman University
Dhruv Galgotia: Galgotias University

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Abstract: This study examines the link between organizations' focus on AI and their environmental, social, and governance (ESG) score. Furthermore, this study examines the relationship between organizations' AI focus and financial performance, measured by return on assets (ROA) and Tobin's Q. This manuscript relies on observations from a balanced panel of data comprising 432 publicly listed companies headquartered in Europe. The sample excludes banks and insurance companies, given their distinct accounting, governance, and capital structure standards. The sample consists of observations spanning from 2015 to 2023. Observations are gathered from LSEG Data & Analytics. We conduct baseline regression models. To ensure rigor, we also applied Hausman tests, variance inflation factors (VIF), and several robustness checks. The present manuscript is grounded in the economic theory framework. The empirical findings indicate: I) a positive and significant association between organizations' AI focus and their environmental (b = 0.127***; p = 0.001) and social pillar scores (b = 0.072**; p = 0.023); II) a positive and significant link with financial performance (ROA: b = 0.094**; p = 0.012; TobinQ: 0.103*; p = 0.051) and; III) a positive but statistically insignificant relationship with governance pillar scores (b = 0.030; p = 0.166).The obtained results yield significant contributions to both theory and practice. Specifically, the obtained results clarify and reconcile previously heterogeneous findings in the literature. Furthermore, it emphasizes that an organizational focus on AI may contribute to advancing the United Nations Sustainable Development Goals, while simultaneously enhancing financial performance.

Keywords: Europe; Sustainable development goals; ESG performance; Financial performance; Artificial intelligence (search for similar items in EconPapers)
Date: 2026-03
Note: View the original document on HAL open archive server: https://hal.science/hal-05433094v1
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Published in Technological Forecasting and Social Change, 2026, 224, pp.124499. ⟨10.1016/j.techfore.2025.124499⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05433094

DOI: 10.1016/j.techfore.2025.124499

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